Correlation Between Jadroplov and AD Plastik
Can any of the company-specific risk be diversified away by investing in both Jadroplov and AD Plastik at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Jadroplov and AD Plastik into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jadroplov dd and AD Plastik dd, you can compare the effects of market volatilities on Jadroplov and AD Plastik and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Jadroplov with a short position of AD Plastik. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jadroplov and AD Plastik.
Diversification Opportunities for Jadroplov and AD Plastik
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jadroplov and ADPL is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Jadroplov dd and AD Plastik dd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AD Plastik dd and Jadroplov is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Jadroplov dd are associated (or correlated) with AD Plastik. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AD Plastik dd has no effect on the direction of Jadroplov i.e., Jadroplov and AD Plastik go up and down completely randomly.
Pair Corralation between Jadroplov and AD Plastik
Assuming the 90 days trading horizon Jadroplov dd is expected to under-perform the AD Plastik. In addition to that, Jadroplov is 1.05 times more volatile than AD Plastik dd. It trades about -0.36 of its total potential returns per unit of risk. AD Plastik dd is currently generating about -0.08 per unit of volatility. If you would invest 950.00 in AD Plastik dd on October 20, 2024 and sell it today you would lose (30.00) from holding AD Plastik dd or give up 3.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 62.5% |
| Values | Daily Returns |
Jadroplov dd vs. AD Plastik dd
Performance |
| Timeline |
| Jadroplov dd |
| AD Plastik dd |
Jadroplov and AD Plastik Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jadroplov and AD Plastik
The main advantage of trading using opposite Jadroplov and AD Plastik positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jadroplov position performs unexpectedly, AD Plastik can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in AD Plastik will offset losses from the drop in AD Plastik's long position.| Jadroplov vs. Dalekovod dd | Jadroplov vs. Institut IGH dd | Jadroplov vs. Zagrebacka Banka dd | Jadroplov vs. Podravka Prehrambena Industrija |
| AD Plastik vs. Dalekovod dd | AD Plastik vs. Institut IGH dd | AD Plastik vs. Jadroplov dd | AD Plastik vs. Zagrebacka Banka dd |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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